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NPA discusses ‘hub and spoke’ with competition watchdog

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The National Pharmacy Association has held a meeting with senior officials at the Competition and Markets Authority (CMA) to discuss the potential impact of hub and spoke dispensing on community pharmacy.

The Association has persistently calling on the competition watchdog to look into hub and spoke dispensing to ensure fairness.

A public consultation is currently under way on government plans to enable ‘inter-company hub and spoke’, where a pharmacy outsources elements of its dispensing to a third party, since the Medicines and Medical Devices Act became law in 2021 which paved the way for regulations to legalise the model.

The NPA told senior officials at CMA that a fair and competitive market for hubs would be essential to avoid unintended consequences such as price rises and poor service.

It asked the competition watchdog to consider the matter prior to commencement of the policy and also to commit to a post implementation market review.

NPA vice chair, Nick Kaye, who attended the meeting, said: “It is highly likely only a few companies in the market will be able to provide fully comprehensive external hub dispensing services to pharmacies, at least initially. This would put pharmacies in a weak position as customers and might also lead to a rise in medicines prices for the NHS, the taxpayer and the public.

“If pharmacies are truly to benefit from hub and spoke dispensing, there needs to be a dynamic and competitive market in which hubs compete for the custom of pharmacies on the basis of quality service and price.

“Significant capital investment is necessary to set up a hub as well as ongoing costs. This, together with the current restrictive wholesaler distribution arrangements, presents a formidable barrier to market entry.”

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